Correlation Between SSR Mining and Ero Copper

Can any of the company-specific risk be diversified away by investing in both SSR Mining and Ero Copper at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SSR Mining and Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SSR Mining and Ero Copper Corp, you can compare the effects of market volatilities on SSR Mining and Ero Copper and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SSR Mining with a short position of Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSR Mining and Ero Copper.

Diversification Opportunities for SSR Mining and Ero Copper

-0.01

Correlation Coefficient

SSR Mining  Ero Copper

Good diversification

The 3 months correlation between SSR and Ero is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp and SSR Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SSR Mining are associated (or correlated) with Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of SSR Mining i.e., SSR Mining and Ero Copper go up and down completely randomly.

Pair Corralation between SSR Mining and Ero Copper

Assuming the 90 days trading horizon SSR Mining is expected to under-perform the Ero Copper. In addition to that, SSR Mining is 1.27 times more volatile than Ero Copper Corp. It trades about -0.03 of its total potential returns per unit of risk. Ero Copper Corp is currently generating about 0.02 per unit of volatility. If you would invest  1,894  in Ero Copper Corp on September 4, 2024 and sell it today you would earn a total of  245.00  from holding Ero Copper Corp or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

SSR Mining  vs.  Ero Copper Corp

SSR Mining

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SSR Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Ero Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ero Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with SSR Mining and Ero Copper

The main advantage of trading using opposite SSR Mining and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR Mining position performs unexpectedly, Ero Copper can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ero Copper will offset losses from the drop in Ero Copper's long position.

The idea behind SSR Mining and Ero Copper Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.